Sunday, February 7, 2016

DARK MONEY: New Path for Masking Super PAC Donors

Funds from limited liability companies grow, making it harder to know the name of the ultimate donors

Wealthy donors in the 2016 presidential election are increasingly using private companies to mask their donations to super PACs, circumventing disclosure rules as they pour millions in difficult-to-trace cash into the campaign.

In 2015, more than 200 limited liability companies—whose disclosure requirements vary from state to state—donated almost $11 million to super PACs backing six presidential candidates. That’s more than four times as much as in 2011, when such entities donated less than $2.5 million to a single super PAC.

In a presidential election that is expected to be the most costly in U.S. history, the expansion of anonymous donations is drawing concerns from campaign-finance watchdogs and could pose a dilemma for the candidates—particularly as they promise transparency on the campaign trail.

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The super PAC backing former Florida Gov. Jeb Bush raised the most from LLCs in 2015: $4.6 million, including a $1 million donation from Jasper Reserves LLC, in Charleston, W.Va. The ultimate donor revealed himself as coal billionaire Chris Cline last August. A spokesman for the super PAC said it complies with FEC rules.

A super PAC backing Florida Sen. Marco Rubio has raised $3.8 million from such entities—including $500,000 from IGX LLC, whose filing in Delaware only lists the company that registered it. A review of previous donors to Mr. Rubio’s super PAC and his campaign showed that IGX is run by Andrew Duncan of Brooklyn, N.Y., who has described himself in other FEC filings as a self-employed investor. That connection would have been impossible to glean had he not previously donated to Mr. Rubio’s campaign.